April 7, 2020

COVID-19 impact on logistics

How can KPMG Supply Chain support you
April 2020

Companies continue to struggle with the impact of COVID-19. For some like
life sciences and consumer goods companies, this crisis has brought
The world
unplanned growth. Others like retailers and industrial firms are coping with
around us
lost business. The question facing all of them is: how do you manage a
global supply chain through a pandemic?

Customers Transportation Warehousing Inventory

Does your crisis Have you Have you Do you have
response team explored carrier established visibility into
have logistics availability and your warehouse where critical
Where resources and a capacity? flow gaps? materials are in
do you plan in place? the supply chain?
stand with
Is there line of Will ports Which warehouse Do you have an
respect to...
sight of how be open to resources can understanding of
customer orders receive inbound work remotely where you can
are impacted? shipments? and how will (re)deploy
on-site resources assets?
work?

You’re still stabilizing and prioritizing ...Leverage planning and execution of

logistics operations... Crisis management office skills
You’re transitioning the operation into ...Re-optimize using logistics analytics
Timing is
the “new normal”... to support updated demand
everything
projections
if…
You’re planning your response for the ...Develop logistics playbooks with
next shock... procedures to address expected
scenarios

© 2020 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity. All rights reserved. NDP083321-2A
 April 7, 2020

— Activate logistics emergency plans and crisis management office

— Understand federal/state regulation implications on transportation and
What we warehousing (e.g., “Know before you go” practices)
can do — Coordinate carrier communication and manage logistics capacity
Immediate constraints/disruptions (e.g., mode shifting, wave planning)
focus — Develop transportation and warehouse action plan to preserve service levels
Stabilize the
logistics — Utilization of project accelerators such as risk tracking tools and
organization communication templates, pre-defined data collection templates
Our key — Logistics “Control Tower” governance processes, dashboards and
differentiators diagnostic analytics to identify carrier and warehouse labor performance
— Secure hosted environment to manage data and provide results
— Ability to leverage extensive network of internal and external resources

— Redesign the transportation and warehouse operating model for resiliency

— Redefine logistics enablement options for resiliency (e.g., automation,
What we control tower)
can do — Logistics cost improvement initiatives to fund future state operating model
Medium-
(e.g., FP&A evaluation, warehouse labor)
term focus
— Optimize distribution network flows for the “new normal” operating model
Transition to
the “new — Advanced data prep tools to extract and cleanse data
normal” — Optimization tools for specific logistics challenges (e.g., route
Our key
optimization, network optimization, inventory optimization)
differentiators
— Process and organization frameworks as well as industry-specific,
logistics benchmark metrics to support operating model design

— External partner strategy (e.g., operate/buy decisions, capability analysis)

What we — Logistics risk strategy (e.g., carrier health, import/sourcing dependency)
can do — Warehouse planning and design (e.g., operations, inventory, layout, MHE)
Long-term — Logistics control tower/WMS/TMS/LM implementation support
focus — 3PL bid templates and cost modeling tools
Plan for — Risk management best practices library and evaluation tools (e.g., supplier
future financial risk management)
resiliency Our key
— Software solution agnostic toolkit called “Powered Enterprise” to implement
differentiators
WMS, TMS, LM, and Control Tower technologies
— U-Collaborate facilitation tools to develop global designs for
technology enablement

KPMG tested approach to sustained logistics resiliency

After taking near-term actions to stabilize, our approach integrates those learnings as foundation for a more mature capability
Level 5 – Comprehensive
Logistics risk are managed globally on a
continuous basis using technology to monitor key areas
Level 4 – Externally Integrated
Scope: Sites, Carriers, Tiers

3PLs and carriers are part of the risk management processes,

Focus: Tactical to Strategic

Use of Advanced Analytics

Ability to be Proactive
controls, and governance models with “Tier 1” visibility
Level of Integration
Value & Impact

Level 3 – Internally Integrated

Business units and the logistics organization have formal
processes and common technology platforms providing
visibility to remediation steps being executed
Level 2 – Fragmented
Select sites using manual processes with experienced
managers to bridge short-term crises
Level 1 – Reactive
Organizations have no formal mechanism and coordinate
ad hoc responses to disruptions as they arise
Logistics Resiliency Strength

Yatish Desai Manish Singh

Principal Managing Director
Contact us Supply Chain & Operations Supply Chain & Operations
+1 440-725-8547 +1 201-519-5576
ydesai@kpmg.com mksingh@kpmg.com

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© 2020 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG NDP083321-2AInternational”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks
of KPMG International.